If you can't afford your house anymore, you have more options than foreclosure — and more time than you might think. Federal rules generally bar your mortgage servicer from starting foreclosure until you're more than 120 days behind.[3] Before that, your servicer has to reach out and explain your options.
The catch is that the options shrink the longer you wait. Some only work if you're a few months behind. Others, like selling, work best before your credit takes the hit.
If you're behind on your mortgage, do these things first:
- Call your servicer. Tell them you're struggling and ask for a loss mitigation application.
- Call a HUD-approved housing counselor. It's free. Call 800-569-4287 or search online.[5]
- Gather your paperwork. Pay stubs or W-2s, a list of monthly expenses, your mortgage statement, other debts, and any letters from your lender.
- Don't pay anyone who promises to stop foreclosure. Legitimate help is free.
Looking for solutions? Clever can help. Find top-rated agents with the experience you're looking for — and benefit from Clever's pre-negotiated commission savings if and when you decide to sell. Enter a few home facts, see what different agents suggest for your situation, and make an informed decision on how best to move forward — no added fees or obligation.
What happens if you can't pay your mortgage?
Missing a payment starts a clock. Here's roughly how it runs:
- Days 1–15. Most mortgages have a grace period, often 15 days, before a late fee kicks in.
- After the grace period. You'll owe a late fee — a percentage of your overdue principal-and-interest payment, often around 4–5% — not a percentage of your whole balance. Your mortgage documents set the exact amount, and state law may cap it.[6] FHA and VA loans cap late charges at 4% of a payment that's more than 15 days late.[7][8]
- 30 days late. The late payment can show up on your credit report, where it stays for seven years.[9]
- By day 36. Your servicer has to try to reach you by phone or in person, and by day 45 it has to send you a written notice about your options.[10]
- After 120 days. This is the earliest your servicer can make the first official filing or notice to start foreclosure.[3]
- The sale. How long it takes from here depends on your state. In judicial states, a court has to order the sale; nonjudicial foreclosures move faster.[11] Some states also give you a redemption period after the sale to pay off the debt and reclaim the home.
- REO & eviction (6+ months): If your home sells, you’ll receive a notice to vacate the property (if you haven’t already). Unsold homes become bank-owned, and you’ll receive an eviction notice, as required by state law.
- Redemption period: After the sale, some states offer a redemption period, during which you can reimburse the highest bidder or pay off the entire mortgage to reclaim your home.
On average, foreclosures completed in the second quarter of 2026 took 563 days from the first filing — the shortest since 2013 — but that ranged from 155 days in Texas to more than 3,400 in Louisiana.[12] Foreclosure filings are also rising, up 21% in the first half of 2026 compared with a year earlier.
» LEARN: How many mortgage payments can you miss before foreclosure?
If you’re facing foreclosure, it’s critical to seek local legal advice and understand your state’s policies. Visit your state’s housing agency website or contact a local nonprofit specializing in housing assistance. NoLo[13] has a brief rundown of each state’s foreclosure laws, while foreclosurelaw.org[14]has more detailed state-by-state information. You can also contact a housing counselor through the U.S. Department of Housing and Urban Development (HUD)[15].
How can I keep my house if I can't afford it right now?
If your hardship is temporary, you have several ways to catch up. Which ones you qualify for depends on how far behind you are and who owns or insures your loan.
"If you expect to recover from your financial problems soon, you should contact your mortgage service early and let them know," said Alexi Morgado, a realtor and founder of Lexawise Real Estate Exam Prep. "They may offer you a forbearance or loan modification. In the worst case, it's always better to try to sell the property."
The sooner you contact your lender for mortgage assistance, the better — especially if you want to keep your home. Your lender will likely refer you to its loss mitigation department to discuss options such as refinancing or loan modification.
“The best-case scenario is that the homeowner is proactive and contacts the loan servicers, alerting them of the situation and the desire to catch up on the loan,” said DJ Olojo, a real estate agent and investor. “The servicer may make arrangements with the homeowner so they can avoid unnecessary legal fees and stress.”
If you’d like to sell your house to avoid foreclosure, your lender can tell you what you owe. This should include your missed mortgage payments, late fees, and attorney’s fees. Then, use a home value estimate website to determine how much your property is worth (minus the cost of selling) to ensure the final sale price will cover your debt.
📅 Repayment plan
A repayment plan adds a little extra to your regular payment each month until you've caught up on what you missed.[16] It's the simplest fix if you're only a month or two behind and your income is back.
🙏 Forbearance
With forbearance, your servicer lowers or pauses your payments for a set time — up to 12 months in total on a Fannie Mae loan.[16] It doesn't happen automatically; you have to ask. When it ends, you'll repay what you skipped through a lump sum, a repayment plan, a deferral, or a modification.
Don't assume forbearance is invisible to lenders. Your servicer can tell the credit bureaus your account is in forbearance, though it has to keep reporting you as current if you were current going in — so ask exactly how it'll be reported before you agree.[1] And keep track of what you'll owe at the end. "Sometimes sellers are surprised by additional fees owed on their mortgage due to covid forbearance or other things such as a negative escrow," says Adam Sinclair, a real estate agent in Michigan's Bay City, Saginaw, and Midland area.
⏸️ Payment deferral
A payment deferral moves up to six missed payments to the end of your loan, interest-free, so you pay them when you sell, refinance, or pay off the mortgage.[16] On Fannie Mae loans, you generally have to be two to six months behind to qualify.[17]
✍️ Loan modification
A loan modification permanently changes your loan — a lower rate, a longer term, or both — to make the payment affordable. Fannie Mae's Flex Modification aims to cut your principal-and-interest payment by about 20%.[18]
You don't have to be just one month behind to qualify. Fannie Mae generally requires you to be at least 60 days delinquent, or for your servicer to decide you're headed for default.[2] Freddie Mac's version works the same way, and lets owner-occupants who are current apply if default is imminent.[19]
The tradeoff: stretching the term usually means paying more interest over the life of the loan, and you'll make payments under a trial period plan before the modification becomes permanent.
🏛️ FHA, VA, and USDA loans
Government-backed loans have their own relief options:
- FHA. Options include a partial claim, which moves what you owe into an interest-free second lien that you repay when you sell or refinance, plus loan modifications. You can generally get one permanent FHA option every 24 months, a limit that took effect Oct. 1, 2025.[20][21]
- VA. The VA launched its Partial Claim Program on June 15, 2026, a year after its earlier VASP program ended on May 1, 2025.[22][23]
- USDA. Options include special forbearance, loan modification, and a Mortgage Recovery Advance for past-due amounts.[24]
Most state Homeowner Assistance Fund programs, which used federal money to cover missed payments, have now closed; only a handful remain open.[25] Check your state housing agency for other local programs.
💵 Refinance
Refinancing replaces your loan with a new one at a lower rate or longer term. It can work if you're still current and rates have dropped, but it's rarely realistic once you're behind — you'll need decent credit, and closing costs typically run 3–6% of the loan amount.[26]
» MORE: Should you refinance your home?
⚖️ Chapter 13 bankruptcy
If foreclosure is close, filing for Chapter 13 bankruptcy stops it immediately through an automatic stay, and lets you catch up on missed payments over three to five years.[27] It's a serious step with lasting credit consequences, so talk to a bankruptcy attorney first.
How can I get out of my house without a foreclosure?
If the payment is never going to work, the goal is to leave on your terms — protecting as much equity and credit as you can.
🏡 Sell your home
If your home is worth more than you owe, selling is usually the best exit. You pay off the loan, keep the equity, and avoid a foreclosure on your credit.
Start by asking your servicer for a payoff figure that includes missed payments, late fees, and any legal costs. Then estimate what your home would sell for, minus the cost of selling, to make sure the sale covers the debt.
Speed and cost both matter here. Clever Partner Agents list homes for a 1.5% listing fee ($3,000 minimum), compared with the national average listing commission of 2.76%, according to Clever's August 2026 survey of 434 agents.[28] On a $350,000 home, that 1.5% is $5,250.
If you need to close in days rather than months, a cash buyer can move faster, but you'll give up a meaningful share of your home's value. Clever Offers lets you compare cash offers for free and sell in as little as seven days.
» READ: Can I sell my house to avoid foreclosure?
🔑 Rent it out
If you have somewhere else to live and rent in your area would cover the mortgage, taxes, and insurance, renting the home out can buy time. Check your loan first: FHA borrowers, for example, agree to live in the home for at least a year after buying.[29] Budget for vacancies, repairs, and landlord insurance, and talk to a tax pro about rental income.
🏦 Short sale
In a short sale, your lender agrees to let you sell for less than you owe. You'll need to show a hardship and provide financial documents, and the lender has to approve the buyer's offer. Depending on your state and your agreement, the lender may be able to pursue you for the difference, so get any forgiveness of the remaining balance in writing.
📃 Deed in lieu of foreclosure
With a deed in lieu, you hand ownership back to your lender in exchange for being released from the loan. Many lenders, including FHA, require you to try a short sale first.[29]
"For a deed in lieu to work, you have to have a fully clean title," said Ashley Morgan, attorney and owner of Ashley F. Morgan Law, PC, in Virginia. "This means there cannot be any tax liens or judgment liens against the property."
One thing to know for both a short sale and a deed in lieu: forgiven mortgage debt may count as taxable income. The federal exclusion for forgiven debt on a main home doesn't apply to debts forgiven, or forgiveness agreements entered into, after Dec. 31, 2025.[4] Other exceptions, like insolvency, may still apply — ask a tax pro.
Avoid foreclosure rescue scams
Once you fall behind, expect letters and calls from companies promising to negotiate with your lender or stop the foreclosure for a fee. Skip them. You should never have to pay for help avoiding foreclosure.
A HUD-approved housing counselor does the same work for free or at very low cost: reviewing your budget, helping with your application, and negotiating with your servicer. Call 800-569-4287 to find one near you.[5]
Bottom line
Not being able to pay your mortgage is stressful and emotional, but it doesn’t mean a foreclosure is set in stone. You have options, whether staying in your home or letting it go to get your expenses in order.
While the threat of foreclosure can feel overwhelming, the worst thing you can do is nothing. Contact your lender as soon as you miss a payment to discuss your options. Also, lean on a HUD-certified housing counselor, who can offer valuable support and negotiate on your behalf.
FAQs
It depends on where you start. Your servicer can report that your account is in forbearance, but if you were otherwise current, it has to report you as current.[1] If you were already behind, those late payments stay on your report. Ask your servicer how it will report your account, and get the terms in writing.
Yes — in fact, you usually need to have missed some. Fannie Mae's Flex Modification generally requires you to be at least 60 days behind, unless your servicer decides a default is imminent.[2]You'll need to document your hardship and income, and most modifications start with a trial payment period.
Generally, it's too late once your home is sold at auction, though some states offer a redemption period afterward. Before then, a complete loss mitigation application submitted more than 37 days before the sale requires your servicer to evaluate you before moving ahead.[3] Filing for Chapter 13 bankruptcy also stops a sale.
It can be. The federal exclusion for forgiven debt on a main home doesn't cover debt forgiven after Dec. 31, 2025, so a short sale, deed in lieu, or principal reduction in 2026 could create taxable income.[4] Exceptions like insolvency or bankruptcy may still apply, so talk to a tax professional.
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